Nurses' Pay Increases: Request To States Employment Board

STATES OF JERSEY

NURSES' PAY INCREASES: REQUEST TO STATES EMPLOYMENT BOARD

Lodged au Greffe on 12th October 2011 by Deputy G.P. Southern of St. Helier

STATES GREFFE

2011   Price code: B  P.168

PROPOSITION

THE STATES are asked to decide whether they are of opinion

to request the States Employment Board, in co-operation with the Minister for Health and Social Services –

1. to give further consideration to the recommendations of the Income Data Services (IDS) report "Review of nurses' and midwives' pay structure" published in January 2011 and to reconsider its decision of 3rd August 2011 not to approve a 5% uplift in pay for nurses at grade 5 and above, and to request the Board to implement this 5% pay rise with effect from 31st March 2012;
2. to  commence  negotiations  through  the  States  Human  Resources Department on the implementation of a significant pay rise for nurses over the coming 3 or 4 year period in order to address the current difficulties in Jersey in relation to the recruitment and retention of qualified and experienced nurses.

DEPUTY G.P. SOUTHERN OF ST. HELIER

REPORT

This proposition is based on a briefing paper presented on behalf of the Minister for Health and Social Services on Registered Nurses' and Midwives' Recruitment and Retention, presented to the SEB in February 2011. It opens thus –

"The provision of safe, effective and efficient healthcare is fundamentally reliant on the ability to recruit and retain a professional workforce. Providing a diverse range of services on a small island presents many challenges not least the ability to respond to peaks and troughs in service demand, with a workforce that is appropriately skilled.

The paper sets out to inform that –

The  problems  associated  with  the  recruitment  and  retention  of

registered nurses remains.

That targeted recruitment campai gns in areas where RN recruitment

has  been  reduced  as  a  result  of  the  economy  does  not  provide adequate candidate attraction of experienced nurses to Jersey.

If registered nurses face financial  challenges in managing within a

mainland UK economy the relocation to Jersey will be prohibitive.

That concerns raised in regard to the impact of the ageing workforce

is now a reality.

That the UK pool of staff from  which Jersey recruits will be reduced

as  from  1st  April  2011  when  the  limits  are  imposed  on  Tier  2 immigration.

The UK RN vacancy factor in 2010 reduced to 2.5% from the rise in 2009 when vacancies for RN's sat at.3.1%. The reduction reflects a number of factors, such as a volume of newly qualified registered nurses seeking work and the ease of mobility of staff across the UK regions and international community with a range of candidate attraction methods being adopted at local level.

The previous briefing paper in October 2009 raised concerns that the number of funded registered nurse posts in Jersey that were unfilled despite significant sustained and costly actions taken to improve recruitment and retention was 9.6% and as of 7th February 2011 stands at 10%."

Please note the marked difference between the vacancy rates in Jersey and the UK.

This is not just a problem of the worldwide shortage of nurses. Jersey has a serious problem.

The briefing paper goes on to quote 2 further pieces of research –

"The findings of two recent independent reports, undertaken by Tribal and Income  Data  Services,  commissioned  by  the  States  of  Jersey,  have  both

indicated  that  a  problem  exists  now  regarding  the  pay  of  nurses  and midwives".

Their findings are summarized here –

TRIBAL – Commissioned in 2010

Commissioned by the States of Jersey with the following terms of reference –

"to review the effectiveness of existing pay and conditions of service packages across the public service with a view to ensuring that these give good value for money to the island of Jersey, are affordable, and are 'fit for purpose' in terms of recruitment, retention and motivation of staff in the various pay groups"

The summary of findings –

"That nurses salaries are below the UK (compared with inner London) and adjusting the salaries to correct levels would cost in the region on £4.2 million."

The second report was produced by IDS in January 2011, and defines itself thus –

"This report has been produced by Incomes Data Services (IDS) for the States of  Jersey  Health  and  Social  Services  Department.  The  report  has  been compiled following an extensive review by IDS of pay on Jersey for nurses and midwives, involving a comparison of the pay of these job-holders with comparable nursing posts in the UK.

Salaries of Jersey allied health professionals (AHPs) have also been matched with UK jobs and salaries to provide a point of comparison, since there are few recruitment and retention problems relating to the Island's AHPs.

In order to assist with this review, a key element of the work has been to examine Jersey local labour market factors, including housing, childcare and transport costs, as well as recruitment and retention issues. This examination of the local labour market has been crucial in order to place in context the findings from the pay review."

The Key objectives are described as follows –

The main objective of this work has been to establish if the States of Jersey Health and Social Services Department nurses and midwives' pay structure, covering both the registered  and  non-registered  workforce,  is  fit  for  purpose  within  a  small  Island context.

Following a detailed examination of the pay structure, a further objective has been to establish  whether  the  States  of  Jersey  employer  can  sustain  and  support  the recruitment and retention of suitably-qualified and experienced registered nurses and midwives.

Findings and recommendations, in relation to possible future action by the States Employment Board, were to be informed by the following –

Comparisons of pay and conditions for nurses and midwives to their UK counterparts.

A comparison of pay and conditions of local and UK AHPs within a clinically based role.

Analysis  and  comparison  of  local  cost-of-living  and  retail  price indices to ensure appropriate context, to support IDS' findings and recommendations.

A significant part of the work has been to engage in detailed discussions with both the employer and staff-sides, to gain an understanding of the main issues relating to employment on Jersey.

In the briefing paper presented by Health and Social Services on Registered Nurses' and Midwives' Recruitment and Retention presented to the SEB in February 2011, the overall recommendations were as follows –

Overall recommendations:

Increase Grades 5 – 8 salaries by 5% on 2010 salary scale. Combine newly qualified RN and RM within Grades 4 and 5 respectively.

Development of rental subsidy.

Furthermore, whilst the IDS comparisons between salaries locally and in the UK taken before housing costs are not striking, after housing costs are taken into account, the differences are significant –

Cost of living adjusted salary comparisons, including housing

"Key findings

Once  housing  is  introduced  into  the  cost-of-living  adjustments  there  is  a marked deterioration in the salary comparisons. Table 9 shows that senior staff nurses at the top of grade 4 are now 9% below their UK counterparts, nurses and midwives on Grades 5A and 5B are 17% below, and nurses and midwives on Grades 6A and 6B are 16% below."

In terms of direct comparisons with their UK counterparts, Jersey nurses' salaries, after housing costs are taken into account, are simply inadequate. This is in direct contrast to the position of allied health professionals –

"In  contrast,  Table  10  shows  that  AHP'  salaries,  for  staff  employed  on Grades  9  and  10,  are  still  ahead  of  UK  salaries,  although  the  position deteriorates at the top of Grade 11 and across the salary range for senior management positions".

The Tables 9 and 10 referred to are in the Appendix.

Instead of dealing with the underlying pay structure which is at the heart of the recruitment and retention problems in nursing on the Island, the States Employment Board has chosen not to attempt to implement the fundamental recommendations of the commissioned reviews. Instead an alternative approach has been devised through the implementation of a rental subsidy, which will be to some, but not all senior nursing staff.

Under this scheme a housing subsidy worth £5,550 a year is added to Grades 4, 5B, 6B, 7B and 8B. The net salary gain of the proposed rental subsidy is equivalent to the maximum mortgage interest relief on a mortgage interest rate of 5%. This subsidy is then reduced in the second year to 50% of this sum. Thereafter the subsidy ceases.

The costs of the rental subsidy are based on an estimate of 30% of the workforce (2010 RN's) being eligible for a payment. The total sum involved is approximately £1.1 million per annum.

The containment of costs will be governed by the need to calculate on gross household income rather than an RN salary alone and not all RNs eligible for the scheme would be entitled to the full annual subsidy amount.

In addition to failing to meet the overall need for increased rates of pay at senior levels (costed  at  £4.2 million  by  Tribal)  the  subsidy  suffers  from  a  number  of  obvious shortcomings –

1. it is temporary, when the high cost of housing is permanent;
2. it applies only to some nurses, causing substantial salary differentials among staff on the same grade;
3. it does not form part of pensionable pay.

This sort of mechanism can only be a temporary solution which fails to address the underlying problem.

I will refrain here from detailing the long-term projections for nurse recruitment and retention, including as it does such factors as use of agency/bank nurses, the age profile of current staff along with retirements, current shortfalls in recommended staffing levels, especially in registered elderly mental health beds (increasing year on year), number of applicants per post (going down), lead-in times, child care issues and much more.

I simply ask members to study the graph below which shows a 28% gap between supply and demand for nurses over the next 20 years. We have to start now to address this fundamental failure in the free market for this critical skill area. If we want a decent health service today and in the future, we must pay a competitive rate for our nurses.

The conclusions of this increasing deficit in the supply of nurses is summarised in the briefing paper thus –

"It is becoming increasingly difficult to provide the diversity of health and social care, within the staffing levels in place as a result of the recruitment and  retention  problems  of  registered  nurses  and  midwives  requiring  an essential and urgent action that is sustainable.

We  have  worked  to  address  issues  through  creative  initiatives  and partnerships. However we recognise this issue is an island wide issue and our initiatives alone do not enough go far enough to attract and retain talented staff.

To summarise

The predictions that recruitment would get harder has been realized

and will continue

Our vacancy rates are increasing

In turn we are struggling to retain staff which will increase

We are now experiencing an increase in retirements

Jersey is an expensive place to move to

The differentials in pay have  been eroded over the years.

Nurses in Jersey work in a compact pay structure."

I can only conclude that the recruitment and retention of nurses is a long-term problem which requires a long-term solution. We need to start the serious negotiations process required to find the long-term solution now.

Financial and manpower implications

The cost of fully engaging with a long-term review of nurses' and midwives' pay will undoubtedly be less than the cost of not doing so, or of putting it off. As far as this proposition is concerned, the starting point is the immediate cost of the 5% increase in

pay for grades 5 to 8, which amounts to £765,000 following the 2011 2% across the board pay settlement. This cost will need to be met from the central provision voted in the Annual Business Plan debate for the Treasury and Resources Department. The longer-term  adjustment  of  salaries  and  structures  will  depend  on  the  outcome  of negotiations but is unlikely to be more than the £4.2 million required to produce London-weighting parity suggested by Tribal, and phased in over 3 to 4 years. There are no manpower considerations to this proposition.

APPENDIX